TALLINN - The Estonian electricity market fully opened up for competition on Jan. 2, and private consumers can now choose who they buy their electricity from, as do corporate clients; the opening up of the electricity market also brings about an increase in electricity prices, reports Public Broadcasting.
At the moment, one can choose from offers from seven companies: Eesti Energia, Elektrum, 220 Energia, Imatra, VKG, Elektrimuugi and Eesti Gaas. Despite new electricity sellers coming on the market, the majority of consumers have preferred the services of previous electricity seller Eesti Energia.
As of Dec. 30, the state-owned energy concern had concluded more than 386,000 electricity sales agreements.
It is forecast that the open electricity market will increase electricity bills of home consumers by an average of 20 percent. Finance Minister Jurgen Ligi has said that the effects of the electricity price increase on consumer prices is 0.8 percent.
The main electricity grid company Elering’s board chairman Taavi Veskimagi said that there is not yet real competition on the open electricity market, but the situation should improve after Estlink 2 is completed.
Looking at how contracts have been priced in Estonia, the majority have been priced against the electricity bourse price. In other words, these are fixed prices for a longer period of time. “For the consumer, the cheapest electricity should come via the bourse,” Veskimagi said.
Veskimagi said that one of the prerequisites of different pricing of electricity packages is the completion of Estlink 2, the second undersea electricity cable connecting Finland’s grid to Estonia.
“While today very many sellers don’t own production and are resellers, we need electricity sellers from Nordic states that own real production capacities to come to the Estonian market, in addition to Eesti Energia and [Latvia’s] Latvenergo,” he said.
The EstLink 2 electricity cable between Estonia and Finland will be launched at the beginning of 2014 and will triple the electrical system’s connection capacity between Estonia and the Nordic states.